SINGAPORE, April 16, 2024 — Asian stock markets fell sharply today as robust U.S. retail sales in March dampened hopes for early interest rate cuts by the Federal Reserve, sending the dollar soaring to a five-month peak. Investors also braced for upcoming GDP data from China, which is expected to significantly influence regional market sentiments.
MSCI’s broadest index of Asia-Pacific shares outside Japan plummeted by 1.4% to near seven-week lows, while Japan’s Nikkei index saw a 1.6% decline. The U.S. retail sales data, showing a 0.7% increase contrary to the expected 0.3%, hinted at a resilient U.S. economy, thereby potentially delaying any Fed rate cuts until later in the year, possibly September.
Amidst escalating tensions between Iran and Israel, which have kept global risk appetites in check, the price of gold and oil rose. The geopolitical unrest is closely watched by markets, with oil prices climbing significantly. U.S. crude oil and Brent saw increases in their prices due to heightened Middle Eastern tensions, reflecting the jittery nature of global markets amid security concerns.
On the currency front, the Japanese yen weakened to 154.39 against the dollar, which hovered near a 34-year high. Japanese Finance Minister Shunichi Suzuki expressed vigilance over the currency’s sharp movements and mentioned potential intervention if necessary.
As the day progresses, all eyes are on China’s economic data release, which includes GDP growth, industrial activity, and retail sales. These indicators are vital for assessing the health of the Chinese economy and its implications for global markets. Market analysts are particularly keen on the real estate data from China, looking for signs of stabilization or recovery in the housing market.
